Institution: TSMC's first quarter performance is expected to be strong and in line with expectations

Glonghui, April 14 — Bernstein analysts stated in a research report that TSMC is likely to announce strong first-quarter results, in line with market expectations. They noted that the production capacity released by Qualcomm and MediaTek mobile chips should be easily filled by AI chips. They pointed out that energy costs may rise due to Middle East conflicts, but not immediately, adding that there is upside risk to TSMC’s second-quarter profit margin forecast. They explained that since electricity costs account for only a low single-digit percentage of TSMC’s revenues, TSMC should be able to easily raise prices and pass on any increase in electricity costs to its customers. Bernstein believes that although the ongoing chip shortage gives investors hope for another capital expenditure increase, given the ongoing Middle East conflict, TSMC might maintain its capital expenditure outlook this earnings season.